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Despite Threat of Recession, Overwhelming Majority of Ontario Small Business Owners Project Growth for 2016

86 per cent expect increase in business while 43 per cent plan to hire new employees according to Meridian survey

TORONTO, Sept. 30, 2015 /CNW/ - Despite the looming threat of a recession, Ontario small business owners are confident they can weather the storm and continue to grow, according to new data released by Meridian, Ontario's largest credit union. Meridian's 2015 Small Business Banking in OntarioStudy conducted by Leger found that the majority of Ontario small business owners (86 per cent) anticipate growth in 2016, with nearly one-third of those (31 per cent) expecting an increase in business by five to nine per cent. Their outlook is so positive, in fact, that 43 per cent plan to hire more employees next year and another 18 per cent plan to expand their current location.

"While it's great to see such a groundswell of positivity coming from small business owners in the face of a potential downturn, they need the assurance that their businesses can, in fact, succeed in this climate," says Wade Stayzer, Vice President, Small Business at Meridian. "Small business owners must evaluate their costs and core offerings and be agile enough to overcome any potential obstacles and flow with any shifts in the marketplace in order to thrive, not just survive a recession."

While more than half of the respondents cited economic uncertainty as the greatest perceived obstacle to growth in 2016 (56 percent), there are many other factors that can affect small business growth. Rising employee wages (40 per cent) and the introduction of the Ontario Retirement Pension Plan (ORPP) (35 per cent) are among the greatest anticipated challenges. Other potential hurdles include:

Lack of talent available for hiring (32 per cent)

New local competition (25 per cent)

Access to capital (19 per cent)

Riding the Wave: Tips to Help Small Business Owners Weather a Recession

1)

Step up your client service: If business is slow, ensure that you are going above and beyond to satisfy your existing customer base. Over-serviced clients who feel they are in good hands become loyal customers ensuring repeat business doesn't dry up. Offer incentives to these loyal customers to refer their friends, family and colleagues your way.

2)

Play it safe: Avoid any risky business decisions. Now may not be the time to take a risk on a new product launch or similar risky endeavours.

3)

Build surplus deposits: Try to gradually set aside excess money to grow an emergency cushion for when finances are a bit tighter. This enables a business to consider expanding during a sluggish economy when their competitors cannot.

4)

Revisit the business plan: Remember that plan which was created when the business first launched? It should be updated periodically but if it's been a while, this is the time to dig it out, dust it off and revise if necessary to ensure the business is on track and meeting customer needs and demands.

5)

Cut your costs: During a sluggish economy a business may need to reduce expenses. While this is never easy, cutting costs to ensure the company remains in the black may ensure the business lasts for the long-term.

One cost that is of significant concern for small business owners heading into 2016 is banking fees. Sixty per cent of small business owners worry that banking fees are cutting into their profits and a further 68 per cent say if their fees went up any further they would consider moving to another financial institution.

"When it comes to banking fees, it's critical that financial institutions offer value for money," says Stayzer. "These fees are designed to ensure that clients experience the comfort and security of trusted advice to help them better manage their money. If these fees are impacting a company's bottom line, it's critical that business owners seek the advice of a small business advisor who can help explore and assess options that best meet their needs."

Additional Key Findings:

91 per cent of Ontario small business owners say they experienced major challenges when they started their business.

47 per cent said finding appropriate staff was the greatest concern followed by understanding taxes and legal requirements (44 per cent).

83 per cent of respondents consider themselves informed about general policies affecting small businesses in Canada.

About the Survey:The 2015 Small Business Banking in Ontario survey was conducted with 300 small business owners in Ontario from July 13th to July 30th 2015. A mixed methodology of phone and online surveys was used.A probability sample of the same size would yield a margin of error of +/- 5.7%, 19 times out of 20.

About Meridian:With over 70 years of banking history, Meridian is Ontario's largest credit union, helping to grow the lives of more than a quarter of a million Members, including over 19,000 business Members. Meridian has $11 billion in assets under management and delivers a full range of financial services online, by phone, by mobile and through a network of 71 branches and 7 business centres. Meridian Members also have access to THE EXCHANGE® Network, with more than 2,500 no-fee ABMs across Canada and 360,000 ABMs in the United States. For more information, please visit meridiancu.ca.